The Cabinet yesterday introduced a plan to improve the banking system in the hope of attracting 250 companies to list themselves on the local stock markets within the next three years.
"The banking sector reforms are designed to reignite the banking industry's competitiveness," Premier Su Tseng-chang (蘇貞昌) said at the weekly Cabinet meeting.
He said reform plans for administrative development, human resource development and public construction projects would be introduced in the near future.
Financial Supervisory Commission (FSC) Chairman Shih Jun-ji (施俊吉) said the goal is to encourage investment, both foreign and local.
The government would prioritize the sale of government-owned shares of local banks, he said.
The government also expects to see foreign-currency bonds to be on issue by 2009, he said.
"Within the next three years, it is our estimate that local banks' businesses will grow at the rate of 22 percent a year and the total net profit will reach NT$70 billion [US$2.125 billion] by the end of 2009," Shih said. "In the meantime, we will try to attract more foreign investments."
The commission hopes to see 70 companies making initial public offerings (IPO) next year, up from about 40 firms this year, and the increase in IPOs growing at 14 percent per annum in the next two years.
The reform plan comes as an increasing number of Taiwanese firms and their subsidiaries are launching IPOs in Hong Kong to bypass the nation's bans on China-bound investment, Taiwan's largest investment destination.
"We make the policies and targets under the `status quo' precondition for cross-strait relations," Shih said when asked if the goals were realistic without an easing of cross-strait relations.
"We believe we can achieve these goals without any changes to current cross-strait policy," he said.
The FSC plans to streamline the review process for IPO applications in order to achieve its target. Taiwan Stock Exchange Chairman Gordan Chen (陳樹) has called on underwriters for advice and for help in promoting the listing of state firms such as Taiwan Power Co (台電).
It also hopes to boost foreign investment from 18 percent of daily turnover to 20 percent in 2009, which would mean an injection of US$32 billion. It wants foreign investment to hold 35 percent of total stock market value, up from 31 percent now, by 2009 as well.
On banking front, the commission plans to continue to push for consolidation, including allowing troubled banks to sell outlets separately if their recapitalization activities are inadequate to bail themselves out.
It is considering auctioning off the problematic banks all at one time to expedite consolidation if the banks cannot save themselves by the end of this year.
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